Global Dairy Update April 2018

1
GLOBAL DAIRY
UPDATE
APRIL 2018
KEY DATES
Late May 2018
Q3 Business Update
Announcement
1 June 2018
Measurement Date for Share
Standard 2018/19 Season
September 2018
FY18 Annual Results
Announcement
1 December 2018
Compliance Date for Share
Standard 2018/19 Season
• Import demand for dairy softened across all
regions for the month. China imports down
for the first time since May last year.
• Continued steady export growth from the
EU and the US. New Zealand and Australia
exports up for the month.
• New Zealand production flat for the last
twelve months. Increased production from
the EU continues.
• In March, Fonterra New Zealand milk
collection was down 3% to 143 million kgMS,
and Fonterra Australia collection was up
32% to 11 million kgMS compared to March
last year.
• Anchor brand expands with return of Anchor cheese.
• Farmers see state of the art plant first hand.
• Co-op farmers dominate New Zealand Dairy Industry Awards.

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illustrates year-on-year
changes in imports –
2
OUR MARKETS
GLOBAL IMPORTS
IMPORT DEMAND FOR
DAIRY SOFTENED ACROSS
ALL REGIONS FOR
THE  MONTH. CHINA IMPORTS
DOWN FOR  THE FIRST TIME
SINCE MAY LAST YEAR
Latin America’s dairy
import volumes¹ decreased
10% or 16,000 MT in
December compared to the
same month the previous
year. This decline was driven
by cheese, AMF, fluid and
fresh dairy and WMP which
were down a combined 20%
or 17,000  MT.
Imports for the 12 months
to December were up 1%
or 16,000 MT. While WMP
and cheese imports were
down 86,000 MT, or 13%,
this was more than offset
by increases in most other
categories in particular SMP
and whey powder.
Asia (excluding China)
dairy import volumes¹
decreased 6% or 22,000 MT
compared to December last
year. This was largely due to
a 23%, or 20,000 MT, decline
in SMP.
Imports for the 12 months
to December were up 1%,
or 31,000 MT, compared
to the same period the
previous year.
This was primarily driven
by growth in cheese, and
WMP imports, up 7%
or 80,000 MT, partially
offset by declines in SMP,
whey powder and infant
formula, down a combined
58,000  MT.
Middle East and Africa
dairy imports¹ in December
decreased 1%, or 3,000  MT,
compared to the same
month the previous year.
This was mainly due to a
decline in fluid and fresh
dairy, down 20,000  MT,
partially offset by a
combined 16,000 MT
increase in WMP and
butter imports.
Imports for the 12 months
to December were down
2%, or 72,000 MT. Declines
were seen across most of
the key import categories
except fluid and fresh dairy
and SMP which were up a
combined 4%, or 63,000 MT
for the period.
China dairy imports were
down 10% or 21,000 MT
in February compared to
the same month last year,
on the back of declines in
WMP, fluid and fresh dairy
and cheese.
February imports were down
following the significant
increase in January, as
the market is believed to
have retained some of the
additional product imported
in January.
Imports for the 12 months
to February were up 16%, or
374,000 MT, compared to
the same period last year,
with growth seen across all
categories apart from casein
and lactose, which were
down a combined 1,400  MT.
LATIN AMERICAASIAMIDDLE EAST & AFRICACHINA
Import change for the 12
months to February 2018
Import change for the 12
months to December 2017
Import change for the 12
months to December 2017
Import change for the 12
months to December 2017
116
2
1
1 Estimates are included for those
countries that have not reported data.

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illustrates year-on-year
changes in exports –
3
OUR MARKETS
GLOBAL EXPORTS
CON
TINUED STEADY
E
XPORT GROWTH FROM
THE
EU AND THE US.
NEW ZEALAND AND
AUSTRALIA EXPORTS UP FOR
THE MONTH
Total New Zealand
dairy exports in February
increased 4%, or 11,000  MT,
compared to the same
month last year.
Growth was again driven
by WMP and fluid and fresh
dairy, up a combined 12%, or
16,000 MT, for the month,
slightly offset by declines in
cheese, lactose and AMF.
Exports for the 12 months
to February were flat on the
previous comparable period.
While there has been a
substantial increase in
exports of fluid and fresh
dairy and WMP, two of the
largest export categories,
which were up a combined
117,000 MT, or 7%, this was
offset by declines across
most other categories.
EU dairy exports in
January increased by 10%, or
39,000 MT, compared to the
same month last year.
Exports grew for all
categories except WMP
and caseinate, which were
down a combined 9,000  MT.
Growth was primarily driven
by fluid and fresh dairy,
infant formula and whey
powder, up a combined
33,000 MT, or 19%.
Exports for the 12 months
to January were up 6%, or
323,000 MT, on the previous
comparable period. Exports
grew in most of the key
categories, in particular SMP
which grew 213,000  MT,
or 37%, and infant formula
which grew 74,000  MT,
or 15%.
US dairy exports in
February increased by 18%,
or 31,000 MT, compared to
the same month last year.
There were increases across
all but three of the export
categories this month. SMP,
lactose and whey powder led
the increase, up a combined
23,000 MT, or 22%.
Exports for the 12 months
to February were up 6%, or
126,000 MT, on the previous
comparable period.
Increases were seen across
most export categories,
in particular cheese, whey
powder and SMP, which were
up a combined 116,000  MT.
Australia dairy exports
increased 16%, or 9,000  MT,
in February compared to the
same month the previous
year. This was largely driven
by exports of SMP, fluid and
fresh dairy and WMP, up a
combined 27%, or 9,000  MT,
compared to the same
month last year.
Exports for the 12 months
to February were flat on the
previous comparable period.
There were increased
exports of fluid and fresh
dairy and infant formula, up
38,000 MT and 7,000 MT
respectively, however most
other export categories
including WMP, whey
powder and butter, declined
for the period.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
60
0
6
Export change for the 12
months to February 2018
Export change for the 12
months to February 2018
Export change for the 12
months to February 2018
Export change for the 12
months to January 2018

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illustrates year-on-year
changes in production –
4
OUR MARKETS
GLOBAL PRODUCTION
NEW ZEALAND
PRODUCTION FLAT FOR
THE LAST TWELVE MONTHS.
INCREASED PRODUCTION
FROM THE EU  CONTINUES
Total New Zealand milk
production in March was
down 1% compared to the
same month last year.
Although weather conditions
across most of the country
have shown signs of
improvement in recent weeks,
overall production is down
compared to March last year.
For the 12 months to March,
milk production was flat
compared to the same period
the previous year.
Fonterra collections have been
reported for March, see page 5
for details.
Australia milk production
in February increased 2%
compared to the same month
last year, largely due to
favourable weather conditions.
Production for the 12 months to
February was up 1% compared
to the same period the
previous year.
Milk production growth
continues to be steady,
particularly in south east
Australia, where improved
seasonal conditions and
cost efficiencies have
increased production.
Fonterra collections in Australia
have been reported for March,
see page 5 for details.
EU milk production in
February was up 3% compared
to the same month last year.
Production increased across
most of the EU in February,
with the United Kingdom,
Ireland, Poland and Italy
showing the most growth, up
a combined 2%. Growth in the
EU is primarily due to increased
spring production.
Production for the 12 months to
February was up 3% compared
to the same period the
previous year.
US milk production in
February increased 2%
compared to the same month
last year.
The increase in production
continues to be driven by larger
herd numbers and improved
production per cow.
Milk production for the
12 months to February
increased by 2% compared
to the same period the
previous year.
NEW ZEALANDAUSTRALIAEUROPEAN UNIONUSA
Production change
for the 12 months to
February 2018
Production change
for the 12 months to
March 2018
Production change
for the 12 months to
February 2018
Production change

for the 12 months to
February 2018
0123
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To view a table that shows our
detailed milk collection in New
Zealand and Australia compared
to the previous season –
VOLUME M LITRESDAY
JUNJULAUGSEPOCTNOVDECJANFEBMARAPRMAY









5
OUR MARKETS
FONTERRA MILK COLLECTION 2017/18 SEASON
NEW ZEALANDNORTH ISLANDSOUTH ISLANDAUSTRALIA
Decrease for the season
from 1 June to 31 March
Decrease for the season
from 1 June to 31 March
Decrease for the season
from 1 June to 31 March
Increase for the season from
1 July to 31 March
321
26
NEW ZEALAND MILK COLLECTION
Fonterra’s milk collection
across Australia in March
reached 11 million kgMS,
3 million kgMS higher than
March last season.
The increase in March is
due to a combination of
increased milk supply to
Fonterra and favourable
seasonal conditions
supporting production
growth from new and
existing Fonterra suppliers.
North Island milk
collection in March reached
79 million kgMS, 6% down
on March last season.
South Island milk
collection in March reached
64 million kgMS, 1% above
March last season.
Fonterra’s milk collection
across New Zealand
was 143 million kgMS in
March, 3% behind March
last season.
While some northern regions
had higher collections this
month, overall production is
down relative to the strong late
season production last year.
For the ten months to 31 March,
milk collection was 1,314 million
kgMS, 2% behind last
season. The difficult weather
experienced this season has
contributed to the decline.
Decrease of 2%
on last season
1,500M
KGMS
As we near the end of the
season, milk supply trends over
recent months mean that our
latest full season milk collection
volumes are now forecast to be
2% lower than last season.
This is an improvement from
our previous forecast of
1,480 million kgMS.
Forecast Fonterra
Milk Collection Across
New Zealand

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To view more information,
including a snapshot of the
rolling year-to-date results –
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GDT PRICE INDEXNZDUSD SPOT RATE
APR  FEB 
JUN 
SEP 
NOV 
FEB APR JUN  SEP  NOV  APR 





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PRICE INDEX
NZD  USD
OUR MARKETS
FONTERRA GLOBALDAIRYTRADE RESULTS
Fonterra GDT sales
by destination:
Dairy commodity prices
and New Zealand
dollar trend
The New Zealand dollar
tracked sideways against the
US dollar through March,
despite renewed volatility in
the wider financial market.
Fonterra GDT results at
last trading event
17 April 2018:
The next trading event will be held on 1 May 2018. Visit www.globaldairytrade.info for more information.
Change in Fonterra’s
weighted average product
price from previous event
2.9
Fonterra’s weighted
average product price

(USD/MT)
3,701
USD
Fonterra product quantity
sold on GDT
000’ MT
18.1
NORTH ASIA (INCLUDING CHINA)
SOUTH EAST ASIA
MIDDLE EAST AND AFRICA
LATIN AMERICA
OTHER
USD 6,120/MT
5.4
AMF
USD 3,855/MT
4.8
CHEDDAR
USD 5,654/MT
2.9
BUTTER
USD 1,947/MT
2.8
SMP
USD 5,792/MT
2.2
RENNET CASEIN
USD 3,311/MT
1.0
WMP
18,147
MT
LATEST AUCTION
482,681
MT
FINANCIAL
YEAR‑TO‑DATE

7
OUR PERFORMANCE
Anchor brand grows
bigger with launch of
Anchor cheese
Fonterra’s iconic Anchor™
brand is about to get bigger
with the return of Anchor™
cheese – and this time
there’s a guaranteed lactose
free option.
For years milk, butter and
yoghurt have all been part
of the Anchor™ range
and Fonterra Brands
New Zealand Director of
Marketing, Clare Morgan,
says the addition of
cheese continues Anchor’s
tradition of a love of dairy
and innovation.
“When pioneer Henry
Reynolds launched Anchor™
in 1886 he would have never
imagined that over a century
later more than 150 Anchor™
products would be sold
every minute.”
As well as the traditional
Tasty, Colby and Edam, there
are two new additions –
Protein+ and Zero Lacto.
“We’re excited to see our
Anchor™ cheese in the
fridges. It’s giving Kiwis back
one of the most trusted
and liked cheese brands in
the country.
“While most hard cheese is
naturally low in lactose, Zero
Lacto is the first lactose free
cheese to be launched in
New Zealand.
“It’s been introduced as an
additional option for Kiwis
with lactose intolerance and
is batch tested to ensure
there is no lactose, providing
a guaranteed lactose free
cheese option.”
Protein+ has 26% more
protein than Anchor™
Tasty and is an easy way for
Kiwis to increase protein in
their diets.
These new cheeses join
the list of more than 160
Anchor™ products that are
today shared in more than
80 countries around the
world, a demonstration of
what pure New Zealand dairy
coupled with enthusiasm
and innovation can achieve.
Farmers see state of the
art plant first hand
A group of our farmers
have visited the new
Apollo plant in Whakatu to
see how Fonterra Brands
New Zealand (FBNZ) has
teamed up with the Hawke’s
Bay company to use state of
the art technology to bring
some of the best in fruit and
dairy beverages to Kiwis.
FBNZ has teamed up with
Apollo Foods to install
innovative beverage filling
technology, which allows a
range of different containers
to be produced on site
and filled with a range of
different products on one
production line.
Managing Director of FBNZ
Leon Clement said a global
surge in demand for dairy
and fruit beverages presents
a fantastic opportunity
to capitalise on the
increasing popularity for
lifestyle beverages.
The new plant allows
FBNZ to extend the shelf
life of products, including
Mammoth flavoured milk,
which was first off the line.
Until now the milk has had a
shelf life of 10 days, but now
the UHT beverage has a life
of up to six months.
This means stores in all parts
of the country will have
product on hand to keep
the fridges stocked. The new
formulation Mammoth also
has 40% less sugar.
As well as Mammoth and
Primo flavoured milk, new
products will be launched
later this year.

8
OUR CO-OP
Co-op farmers dominate
New Zealand Dairy
Industry Awards
Co-op farmers have once
again enjoyed great success
in this year’s New Zealand
Dairy Industry Awards
(NZDIAs) with Fonterra
suppliers winning 29 of the
33 regional titles.
The winners of the three
categories – Share Farmer of
the Year, Dairy Manager of
the Year and Dairy Trainee
of the Year – across the 11
regions will now be assessed
by a national judging panel
and the national titles will
be awarded at a black-tie
dinner at Stadium Southland
in Invercargill on May 12.
Tickets to the dinner can be
purchased online at www.
dairyindustryawards.co.nz.
Fonterra farmers have won
all three national titles for
two consecutive years and
are in with a great chance of
a hat trick.
Nine regional Share Farmer
winners are Co-op suppliers
with nine Dairy Trainee of
the Year winners and all 11
Dairy Manager of the Year
finalists working on farms
that supply milk to Fonterra.
A new award to recognise
dairy farmers who
demonstrate leadership in
their approach to sustainable
dairying will also be
presented at the National
Final awards dinner in May.
The Fonterra Farm Source
Responsible Dairying Award
will recognise those dairy
farmers who are respected
by their farming peers and
their community for their
attitude to and role in
sustainable dairying. The
farmer could come from
any of New Zealand’s milk
suppliers to be eligible for
the award. The inaugural
winner will be selected
by a panel of judges and
announced at the National
Final awards dinner.
Fonterra Farm Source is a
major sponsor of the NZ
Dairy Industry Awards, along
with Westpac, DairyNZ,
Delaval, Ecolab, Federated
Farmers, Honda Motorcycles,
LIC, Meridian Energy and
Ravensdown along with
industry partner Primary ITO.
THE FONTERRA FINALISTS ARE:
Share Farmer of the Year:
• Thomas & Jennifer Read (Hawke’s Bay/Wairarapa)
• Owen Clegg & Hollie Wham (Taranaki)
• Dan & Gina Duncan (Northland)
• Chris & Sally Guy (Auckland/Hauraki)
• Steve Gillies & Amy Johnson (Waikato)
• Reece & Natasha Cox (Bay of Plenty)
• Tim & Melissa Parsons (Central Plateau)
• Simon & Hilary Vallely (Otago/Southland)
• Daniel & Paula McAtamney (Canterbury/North Otago)
Dairy Manager of the Year:
• Angela Strawbridge (Manawatu)
• Gerard Boerjan (Hawke’s Bay/Wairarapa)
• James Holgate (Taranaki)
• Sam Moscrip (Northland)
• Terence Potter (Auckland/Hauraki)
• Chelsea Smith (Waikato)
• Bridie Virbickas (Bay of Plenty)
• Colin Tremain (Central Plateau)
• Jaime McCrostie (Otago/Southland)
• Will Green (Canterbury/North Otago)
• Anthony Lamborn (West Coast/Top of South)
Dairy Trainee of the Year:
• Brock Cumming (Hawke’s Bay/Wairarapa)
• Samuel White (Manawatu)
• Andrew Trolove (Taranaki)
• Eden Ritchie (Northland)
• Quinn Youngman (Auckland/Hauraki)
• Zoe Gleeson (Bay of Plenty)
• Aaron Courage (Waikato)
• Salem Christian (Canterbury/North Otago)
• Sam Goffriller (West Coast/Top of the South)
HAWKE’S BAY WAIRARAPA WINNERS

PRODUCTION
AUSTRALIAAVERAGE
UNITED STATES
NEW ZEALANDEU
DEC JUL JUN MAY MAR FEB JAN SEP NOV OCT AUG APR 
LIQUID MILK M LITRES











,









EXPORTS
AUSTRALIA
UNITED STATES
NEW ZEALANDEU
AUG JUL JUN APR MAR FEB JAN DEC NOV OCT SEP MAY 
MT s








AVERAGE
IMPORTS
MIDDLE EAST & AFRICALATIN AMERICA
ASIACHINA
JUL JUN APR MAR DEC JAN FEB SEP NOV OCT MAY AUG 
MT s






AVERAGE
9

SUPPLEMENTARY INFORMATION
Global Dairy Market
The charts on the right
illustrate the year-on-year
changes in imports, exports
and production for a range of
countries that are important
players in global dairy trade.
The absolute size of
the bars represents the
change in imports, exports
or production, relative
to the same period the
previous year.
Averages are shown where
data is complete for the
regions presented.
NOTE: Data for Asia, Middle East and Africa and Latin America to December; China to February.
NOTE: Data for EU to January; New Zealand, US and Australia to February.
NOTE: Data for EU, US and Australia to February; New Zealand to March.
SOURCE: Government milk production statistics/GTIS trade data/Fonterra analysis.

WEIGHTED AVERAGE PRICEQUANTITY SOLD
MAR
FEB
NOV
OCT
DEC
JUN
JUL
APR
AUG
JAN
SEP
MAY


,

,
,
,
,
, 
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,
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WEIGHTED AVERAGE PRICE USDMT
QUANTITY SOLD  MT
10

SUPPLEMENTARY INFORMATION
Fonterra milk
production
The table on the right
shows Fonterra milk solids
collected in New Zealand
and Australia compared
to the previous season.
MILK COLLECTION
(MILLION KGMS)
MARCH
2018
MARCH

2017
MONTHLY
CHANGE
SEASON-
TO-DATE
2017/18
SEASON-
TO-DATE
2016/17
SEASON-
TO-DATE
CHANGE
Total Fonterra
New Zealand
142.6147.0(3.0%)1,313.81,341.6(2.1%)
North Island79.184.0(5.8%)791.9816.7(3.0%)
South Island63.563.00.8%521.9524.9(0.6%)
Fonterra Australia11. 38.631.8%120.595.626.0%
Fonterra GDT results
This table provides more
information on the latest
results, including a snapshot
of the year-to-date results.
LAST TRADING EVENT
(17 APRIL 2018)
YEAR-TO-DATE

(FROM 1 AUGUST 2017)
Quantity Sold on GDT
(Winning MT)
18, 147482,681
Change in Quantity Sold on GDT
over same period last year
(15.2%)3.9%
Weighted Average Product Price
(USD/MT)
3,7013,335
Change in Weighted Average
Product Price over same period
last year
16.1%4.9%
Change in Weighted Average
Product Price from previous event
2.9%–
Fonterra GDT Results
This chart shows Fonterra
GDT prices and volumes over
the past 12 months.

11
AMF
Anhydrous Milk Fat.
BMP
Butter Milk Powder.
DIRA
Dairy Industry Restructuring
Act 2001 (New Zealand).
Farmgate Milk Price
The price for milk supplied in
New Zealand to Fonterra by
farmer shareholders.
Fluid and Fresh Dairy
The Fonterra grouping
of fluid milk products
(skim milk, whole milk
and cream – pasteurised
or UHT processed),
concentrated milk products
(evaporated milk and
sweetened condensed milk)
and yoghurt.
GDT
GlobalDairyTrade, the
online provider of the twice
monthly global auctions of
dairy ingredients.
kgMS
Kilogram of milk solids, the
measure of the amount of
fat and protein in the milk
supplied to Fonterra.
LME (Liquid Milk
Equivalent)
A standard measure of the
amount of milk (in litres)
allocated to each product
based on the amount of fat
and protein (“milk solids”) in
the product relative to the
amount of fat and protein in
a standardised raw milk.
Non-Reference Products
All dairy products, except
for Reference Products,
produced by the NZ
Ingredients business.
Reference Products
The dairy products used
in the calculation of the
Farmgate Milk Price, which
are currently WMP, SMP,
BMP, butter and AMF.
Season
New Zealand: A period
of 12 months to 31 May
in each year.
Australia: A period of
12 months to 30 June
in each year.
SMP
Skim Milk Powder.
WMP
Whole Milk Powder.

GLOSSARY